Acting on a tip-off, police conducted a raid at Gosain Bigha village under Town police station area and unearthed the mini-gun factory, a senior official said.
Three persons were arrested from the spot.
Deputy Superintendent of police Sharyar Akhtar said police conducted the raid jointly with STF personnel and nabbed three persons from a hut where they were running the illegal mini-gun factory.
Arrested persons were unidentified as Mewalal Vishwakarma, Pravesh Vishwakarma and Rajiv Vishwakarma, the sources said.
Police seized two dozen barrels, three unfinished revolvers and huge raw materials used in manufacturing guns.